In this month’s recap: equities rally here and around the world, economic fundamentals look solid, the pace of home sales slows, and oil surges.
THE MONTH IN BRIEF
During a month marked by political impasses in the United States and United Kingdom, equities performed well around most of the world. On Wall Street, the S&P 500 advanced 7.87% in January, with a new earnings season as well as trade and monetary policy developments providing tailwinds. Most of the economic data that rolled in was good; the partial federal government shutdown may have negatively impacted some of the numbers. Home sales fell off abruptly. Many commodities advanced. All in all, investors focused on the potential of the markets more than disputes.1
DOMESTIC ECONOMIC HEALTH
The Congressional Budget Office believes that the 35-day federal government shutdown cost the economy about $11 billion. The silver lining is that roughly $8 billion of that loss is potentially recoverable, presuming federal spending and consumer spending bounce back in the coming months.2
Due to the length and breadth of the shutdown, a few key economic reports did not appear last month. Nevertheless, there were plenty of attention-getting news items.
As expected, the Federal Reserve left interest rates alone in January. What really intrigued investors was the dovish tone of the Fed’s latest policy statement. It noted that the Federal Open Market Committee would be “patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate” for the economy. The central bank appeared newly cautious: language implying that rate hikes might be merited was now absent.3
In mid-January, China made a move in the U.S.-China trade dispute. It offered a plan to address the U.S. trade deficit, with an objective of cutting it to $0 by 2024. China would undertake a strategy to buy greater amounts of American goods: $45 billion more during 2019, and gradually, more in each of the following five years, with the multiyear increase reaching $1 trillion. Bloomberg News reported that U.S. negotiators wanted China to try and wipe out the trade imbalance within two years, not six. American demand for Chinese-made products is so strong, however, that making any real dent in the trade deficit might be a tall order, given current free market conditions.4
Main Street seemed a bit unsettled by the shutdown and recent stock market volatility. The most respected U.S. monthly consumer confidence gauge, maintained by the Conference Board, fell sharply in January to 120.2, a good reading that still represented its lowest level since July 2017. Its future expectations sub-index hit a 27-month low. At mid-month, the University of Michigan’s consumer sentiment index slipped from its final December mark of 98.3 to 90.7.5,6
The Institute for Supply Management’s twin purchasing manager indices also fell; those numbers exclusively concerned December. In the last month of 2018, ISM’s manufacturing sector index slipped 5.2 points to 54.1; its services sector PMI declined 3.1 points to 57.6. Both readings indicated solid sector expansion, just to a lesser degree than a month before.7
One word summed up the latest jobs report from the Department of Labor: fantastic. In December, employers added 312,000 net new workers to their payrolls. The main unemployment rate rose 0.2% to 3.9%, but that was an effect of more Americans looking for work. The U-6 rate, counting both the unemployed and underemployed, held at 7.6%. Wages were up 3.2% year-over-year, the best annual advance in a decade.8
The Consumer Price Index retreated 0.1% during December after a flat November; the core CPI rose 0.2% in the final month of 2018, replicating its November move. December also brought a slight slip for both the headline (0.2%) and core (0.1%) Producer Price Index.6
As January drew to a close, some significant data was still pending: the first estimate of Q4 GDP, plus the latest reports on personal spending as well as income and durable goods orders. This backlogged data could appear in the first half of this month.
GLOBAL ECONOMIC HEALTH
Would the Brexit be delayed? After the crushing 230-vote defeat of Prime Minister Theresa May’s withdrawal deal in Parliament, the United Kingdom faced six possible options: an extension of the March 29 Brexit deadline set by the European Union, a renegotiation of May’s withdrawal deal, a general election that could bring about a change in U.K. leadership, a “hard” Brexit with no trade agreements with the E.U., another national vote on the matter, or no Brexit at all with the U.K. staying in the E.U. As January ended, May faced a February 13 deadline to return to Parliament with either an altered deal or a statement of which other course of action she wanted the U.K. to pursue. While European Council President Donald Tusk tweeted that the Brexit agreement was “not open for renegotiation,” U.K. Foreign Secretary Jeremy Hunt said that a delayed Brexit could be in order. One key sticking point has been the flow of trade between Ireland and Northern Ireland, which could be disturbed if Northern Ireland leaves the E.U.9,10
China’s factory sector shrunk for a second straight month in January; the reading on the nation’s official manufacturing PMI improved 0.2 points to 49.5. The Chinese economy grew 6.6% in 2018 – a striking advance by global standards, but its smallest expansion since 1990. The effect of that slowdown was being felt in America (where major tech and heavy equipment firms reported declining sales in China) and in Japan, South Korea, and Australia, three of its other major trading partners. (Tariffs on a variety of Chinese imports to the U.S. are slated to rise from 10% to 25% before the end of the first quarter.)11,12
WORLD MARKETS
Investors felt bullish around the world last month, and the performance numbers of major equity benchmarks reflected their optimism. Europe saw broad gains: Russia’s MICEX improved 6.41% in January; Spain’s IBEX 35, 6.05%; the FTSE Eurofirst 300, 5.99%; Germany’s DAX, 5.82%; France’s CAC 40, 5.54%. Even in London, the FTSE 100 gained 3.58%.13
Indices in the Asia-Pacific region, Canada, and South America recorded even larger monthly jumps. Canada’s TSX Composite outperformed the Dow and S&P 500, surging 8.50%. The MSCI Emerging Markets index climbed 8.71% for the month, and MSCI’s World index added 7.68%. Look what two South American benchmarks did: Brazil’s Bovespa soared 11.14%, and Argentina’s Merval, 18.97%. Mexico’s Bolsa posted a monthly advance of 5.64%. Hong Kong’s Hang Seng and South Korea’s Kospi set the pace in the east, with respective gains of 8.11% and 8.03%. Australia’s All Ordinaries rose 3.99%; China’s Shanghai Composite, 3.96%; Japan’s Nikkei 225, 3.79%. The only notable retreats were minor: India’s Nifty 50 lost 0.29%; Malaysia’s KLSE Composite, 0.42%.13,14
COMMODITIES MARKETS
Oil got off to a great start for 2019. By the closing bell on January 31, a barrel of WTI crude was worth $54.04 on the NYMEX, after a 17.94% YTD gain. While natural gas futures lost 4.53% last month, unleaded gasoline improved 4.94%, and heating oil soared 11.71%.15
Among the softs, while cocoa took a 10.50% drop, other major crops rose. Sugar gained 4.16%; soybeans, 3.83%; cotton, 2.99%; wheat, 2.68%; corn, 0.47%; coffee, 0.34%. Copper led the key metals, rising 5.75%. Platinum advanced 4.35%, and silver and gold respectively added 4.05% and 3.03%. Gold ended the month at $1,319.50 on the COMEX; silver, at $16.06. The U.S. Dollar Index lost 0.80% in January.15,16
REAL ESTATE
First, the good news. January brought a significant dip in mortgage rates. In Freddie Mac’s last Primary Mortgage Market Survey of 2018 (December 27), a conventional home loan carried 4.55% interest on average. By January 31, that average interest rate had declined to 4.46%. The trend carried over to 15-year, fixed rate loans (4.01% to 3.89%) and 5/1-year, adjustable loans (4.00% to 3.96%).17,18
Additionally, delayed new home sales data from the Census Bureau showed a 17.0% jump in November to an 8-month high. (The Bureau’s report on January housing starts is still pending as a result of the shutdown.)19
Now, the bad news: existing home sales slowed. The National Association of Realtors announced that resales were down 6.4% month-over-month in December, after improving 2.1% in November. In 2018, existing home sales lagged 3.1% behind their 2017 pace; last year was the poorest year for home buying since 2015.6,20
In other real estate news, the 20-city composite S&P CoreLogic Case-Shiller home price index showed 4.7% annual appreciation in its latest edition (November), which was the slimmest gain in almost four years. The yearly advance had been 5.0% a month earlier. The NAR’s pending home sales index, which measures monthly housing contract activity, fell 2.2% to 99.0 in December; that was its worst reading since April 2014.5,20
T I P O F T H E M O N T H Recent college graduates are certainly challenged to save for the future, what with student loans, rent, and entry-level jobs. It can be tough to set anything aside. Still, saving and investing something is better than nothing, and the effort must be made. Given the power of compounding over time, starting early is smart.
LOOKING BACK, LOOKING FORWARD
Equities got off to a flying start this year. While the big three all gained 7% or better last month, the small caps outran those bullish starts: the Russell 2000 soared 11.19% in January. At the closing bell on January 31, their settlements were: Dow Industrials, 24,999.67; Nasdaq Composite, 7,281.74; S&P 500, 2,704.10; Russell 2000, 1,499.42. Leading the pack among U.S. benchmarks in terms of monthly performance, the PHLX Oil Service Sector index climbed 19.28%. The CBOE VIX declined 34.82% in January, down to 16.57 at the end of the month.1
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. 10-year TIPS real yield = projected return at maturity given expected inflation.
Patient investors sighed with relief at January’s major Wall Street advance. The S&P 500 had not rallied so strongly in January since 1987. It just goes to show that when the bears come out, the bulls are quite capable of coming right back. Going into February, investors have three preoccupations: earnings, the rate of progress in the trade negotiations between the U.S. and China, and the lingering risk of a shutdown in Washington. In the best-case scenario, this month would see a return to business as usual on Wall Street: a leveling out of extreme volatility, a fading memory of December and its anxieties. With luck, maybe we will see that this month instead of a retreat inspired by poor quarterly results or sudden headlines.23
Q U O T E O F T H E M O N T H
“Cherish all your happy moments: they make a fine cushion for old age.”
Christopher morley
UPCOMING RELEASES
What will investors interpret during the rest of 2019’s shortest month? Besides earnings, they will look at the January Consumer Price Index (2/13), the January Producer Price Index (2/14), the preliminary February University of Michigan consumer sentiment index, recent retail sales data, and January industrial output (2/15), minutes from the January Federal Reserve policy meeting as well as new and delayed reports on homebuilding activity (2/20), January existing home sales and leading indicators (2/21), a new Conference Board consumer confidence index, January new home sales, and the December S&P CoreLogic Case-Shiller home price index (2/26), January pending home sales and hard goods orders (2/27), and then, an estimate of Q4 growth (2/28). January personal spending data, the January PCE price index, and the final February University of Michigan consumer sentiment index are slated to appear on March 1.
T H E M O N T H L Y R I D D L E
Many things can make one, it can be of any shape or size, it is created for various reasons, and it can shrink or grow with time. What is it?
LAST MONTH’S RIDDLE: You can see right through me. Different lights make me strange, and for each one, my size may change. What am I?
ANSWER: A pupil.
Your Keystone Team may be reached at 920-969-0717 or admin@kfgwi.com www.kfgwi.com
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admin@kfgwi.com
This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. The information herein has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs, or expenses. Investors cannot invest directly in indices. All economic and performance data is historical and not indicative of future results. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is a market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor’s 500 (S&P 500) is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe. The CBOE Volatility Index® (VIX®) is a key measure of market expectations of near-term volatility conveyed by S&P 500 stock index option prices. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. The MICEX 10 Index is an unweighted price index that tracks the ten most liquid Russian stocks listed on MICEX-RTS in Moscow. The IBEX 35 is the benchmark stock market index of the Bolsa de Madrid, Spain’s principal stock exchange. The FTSEurofirst 300 Index comprises the 300 largest companies ranked by market capitalisation in the FTSE Developed Europe Index. The DAX 30 is a Blue-Chip stock market index consisting of the 30 major German companies trading on the Frankfurt Stock Exchange. The CAC-40 Index is a narrow-based, modified capitalization-weighted index of 40 companies listed on the Paris Bourse. The FTSE 100 Index is a share index of the 100 companies listed on the London Stock Exchange with the highest market capitalization. The S&P/TSX Composite Index is an index of the stock (equity) prices of the largest companies on the Toronto Stock Exchange (TSX) as measured by market capitalization. The MSCI World Index is a free-float weighted equity index that includes developed world markets and does not include emerging markets. The MSCI Emerging Markets Index is a float-adjusted market capitalization index consisting of indices in more than 25 emerging economies. The Bovespa Index is a gross total return index weighted by traded volume & is comprised of the most liquid stocks traded on the Sao Paulo Stock Exchange. The MERVAL Index (MERcado de VALores, literally Stock Exchange) is the most important index of the Buenos Aires Stock Exchange. The Mexican Stock Exchange, commonly known as Mexican Bolsa, Mexbol, or BMV, is the only stock exchange in Mexico. The Hang Seng Index is a free float-adjusted market capitalization-weighted stock market index that is the main indicator of the overall market performance in Hong Kong. The Korea Composite Stock Price Index or KOSPI is the major stock market index of South Korea, representing all common stocks traded on the Korea Exchange. The All Ordinaries (XAO) is considered a total market barometer for the Australian stock market and contains the 500 largest ASX-listed companies by way of market capitalization. The SSE Composite Index is an index of all stocks (A shares and B shares) that are traded at the Shanghai Stock Exchange. Nikkei 225 (Ticker: ^N225) is a stock market index for the Tokyo Stock Exchange (TSE). The Nikkei average is the most watched index of Asian stocks. The Nifty 50 (NTFE 50) is a well-diversified 50-stock index accounting for 13 sectors of the Indian economy. It is used for a variety of purposes such as benchmarking fund portfolios, index-based derivatives and index funds. The FTSE Bursa Malaysia KLCI Index comprises of the largest 30 companies by full market capitalization on Bursa Malaysia’s Main Board. The US Dollar Index measures the performance of the U.S. dollar against a basket of six currencies. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. MarketingPro, Inc. is not affiliated with any person or firm that may be providing this information to you. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.
In this month’s recap: equities rise with a little help from the Fed, oil dives, and most key domestic indicators look quite strong.
THE MONTH IN BRIEF
Presented by KeyStone Team, December 2018
For most of November, the stock market was plagued by the same skepticism evident in October: the sense that corporate profits were declining and economic growth was slowing. Then Federal Reserve chairman Jerome Powell threw investors a line: he delivered a speech late in the month that soothed some of the considerable anxiety in the equity markets. Helped by Powell’s comments, the S&P 500 gained 1.79% on the month. While analysts sensed the bull market was in its late phase, consumers remained confident, enthusiastic participants in an apparently thriving economy. In a surprise, home sales picked up. Oil fell. The United Kingdom scheduled a critical parliamentary vote on the Brexit; China and the U.S. returned to the negotiating table regarding tariffs.1
DOMESTIC ECONOMIC HEALTH
Speaking to the Economic Club of New York on November 28, Federal Reserve chair Jerome Powell delivered a rather dovish message: if interest rates were not quite where they should be, given the robust economy, they were at least close. In his view, rates were “just below the broad range of estimates of the level that would be neutral for the economy – that is, neither speeding up nor slowing down growth.” This was what Wall Street wanted to hear. The Dow Industrials rocketed north 618 points on the day. Just a month earlier, Powell had sounded distinctly hawkish, commenting that rates were a “long way from neutral.”2,3
A trio of reports affirmed that the economy was indeed in good condition. Even after nine years of recovery from the Great Recession, the pace of hiring was still noteworthy: the Department of Labor’s October jobs report said that 250,000 net new jobs were created in the tenth month of the year. Annualized wage growth was at 3.1%, the best in ten years; headline unemployment was at 3.7%, and U-6 unemployment (unemployed and the marginally employed), at 7.4%. According to a Census Bureau report, the pace of retail sales improved 0.8% in October, quite a change from the 0.1% retreat a month before. Finally, as the month ended, the Department of Commerce announced a 0.6% rise in personal spending in October along with a 0.5% improvement for personal incomes.4,5
Burgeoning economies go hand in hand with inflation, and the annualized gain in the Consumer Price Index did grow in October to 2.5% from the previous 2.3%. The yearly advance for the core CPI ticked down 0.1% to 2.1%, however. The federal government affirmed third-quarter growth at 3.5% in its third GDP estimate.5
Consumer confidence indices retreated slightly from recent lofty heights. The University of Michigan’s monthly barometer ended the month at 97.5, down from 98.3; the Conference Board’s index declined to 135.7 from the prior 137.9.5
Now to the factory front. The latest monthly reports from the Institute for Supply Management showed its manufacturing purchasing manager index at 57.7, below the 59.8 level it was at in September. ISM’s service sector PMI dipped 1.3 points last month to 60.3. While these were descents, both readings were quite strong. Hard goods orders declined 4.4% last month, but that mostly had to do with aircraft orders in the defense industry; minus defense and plane orders, they were simply flat for October.5,6
Industrial output rose 0.1% in October, while manufacturing production advanced 0.3%. The Producer Price Index rose 0.6% in October; a 7.6% jump for wholesale gas prices was instrumental in the gain. The October PPI increase left yearly wholesale inflation at 2.9%.5,7
GLOBAL ECONOMIC HEALTH
Last month, lawmakers in the United Kingdom scheduled a parliamentary vote on a draft of the Brexit deal for December 11. If Parliament supports the plan created by Prime Minister Theresa May’s government, the next step would be a vote on a withdrawal agreement from the European Union, pursuant to a European Parliament vote and approval from the E.U. Council. If May’s deal is defeated in London, then the U.K. government will have 21 days to make a choice: it could authorize a renegotiation of the Brexit with the E.U., break off ties with the E.U. without any deal, schedule another U.K. referendum on the Brexit, or call for a general election. May’s deal received formal approval from E.U. leaders in late November.8
On November 30, President Donald Trump, Canadian Prime Minister Justin Trudeau, and Mexican President Enrique Peña Nieto formally signed the United States-Mexico-Canada Agreement (USMCA), the trade pact designed to replace the North American Free Trade Agreement (NAFTA). The accord must still be approved by the legislature of each member nation, and approval may not be easy on Capitol Hill. In the east, the major news item was the evident deceleration in Chinese factory output. China’s official manufacturing PMI dipped to 50.0 in November, meaning no month-over-month expansion for the sector. (Anything below 50 means contraction.) Some analysts see China’s GDP declining to the vicinity of 6.0% in 2019, which would be its poorest GDP in three decades. Its government may need to resort to an economic stimulus if things weaken further.9,10
WORLD MARKETS
Many foreign stock markets saw November gains. Among the biggest: the Hang Seng in Hong Kong, 7.81%; the Merval in Argentina, 6.99%; the Nifty 50 and Sensex in India, at a respective 6.65% and 6.80%. Japan’s Nikkei 225 rose 4.17%, South Korea’s Kospi added 4.08%, MSCI’s Emerging Markets index improved 4.06%, and Russia’s Micex advanced 4.02%. In Spain, the IBEX gained 3.08%; in Brazil, the Bovespa added 3.01%. There were also gains of 2.04% for Canada’s TSX Composite, 1.26% for Taiwan’s TSE 50, 0.96% for the MSCI World index, 0.82% for the FTSE Eurofirst 300, and 0.78% for the Shanghai Composite.11,12
Some indices suffered November setbacks. Germany’s DAX lost 0.27%, the United Kingdom’s FTSE 100, 0.79%. Australia’s All Ordinaries fell 2.35%, while Mexico’s Bolsa retreated 4.15%.11
COMMODITIES MARKETS
A barrel of oil was worth only $50.42 on the NYMEX at the close on November 30. WTI crude dropped 21.80% for the month. Heating oil sank 19.00%, and unleaded gasoline plummeted 20.22%. Natural gas? Quite the opposite. With winter quickly appearing, the value of that commodity jumped 41.29%.13
In crops, soybeans rose 6.74%, and coffee fell 7.88%. In between those extremes, wheat gained 2.84%; cotton, 2.37%; corn, 0.76%. Sugar retreated 2.43%, and cocoa, 3.73%. Copper advanced 4.38% in November; gold also improved, gaining 0.70% to close out the month at a COMEX value of $1,222.10 an ounce. Silver and platinum lost ground last month: silver was off 1.94%; platinum, 4.57%. As November concluded, silver was worth $14.14 an ounce. The U.S. Dollar Index ended November at 96.79 after a one-month loss of 0.35%.13,14
REAL ESTATE
In mid-November, the National Association of Realtors reported a 1.4% October gain for existing home sales. On November 29, however, it said that its pending home sales index had weakened by 2.6% in the tenth month of the year, so the autumn improvement in the pace of residential resales may prove fleeting.5
October also brought less new home buying: sales fell 8.9%. (It must be noted that these initial numbers tend to be revised later.) The Census Bureau also announced a 0.6% decline for building permits in October, but housing starts did pick up 1.5%.5
In terms of mortgages, only adjustable-rate loans grew significantly more expensive in November. The average rate on a 5/1-year ARM was 4.04% on November 1, according to Freddie Mac, but 4.12% on November 29. Mean interest on the 30-year, fixed-rate mortgage went from 4.83% to 4.81% in that period; the average interest rate for the 15-year FRM went from 4.23% to 4.25%.15
Annual home price gains were clearly lessening: the latest 20-city S&P CoreLogic Case-Shiller home price index showed only 5.1% appreciation in the 12 months ending in September.5
T I P O F T H E M O N T H
Many couples buy life insurance when they start a family, insuring both partners (even if one elects to stop working). There is a good reason to insure both partners: If a stay-at-home spouse or partner passes away and is uninsured, a surviving spouse could face sizable expenses to pay for childcare and other household needs.
LOOKING BACK, LOOKING FORWARD
Closing at 7,330.54 on November 30, the Nasdaq Composite eked out a monthly gain of 0.34%. The S&P 500’s 1.79% November rise left it at 2,760.17 at the end of the month, while the small-cap Russell 2000 ascended 1.45% to 1,533.27. (The Russell ended November down 0.15% YTD, lagging well behind the performance of the big three.) The Dow Jones Industrial Average advanced 1.68% to 25,538.46.1,17
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. 10-year TIPS real yield = projected return at maturity given expected inflation.
While words from Jerome Powell gladdened investors last month, Wall Street expects another interest rate move from the Fed this month. On November 30, the CME Group’s FedWatch tool put the chances of a December 19 rate hike at 82.7%. The market has probably priced in a hike, but the Street may not be in the mood for a Santa Claus rally, given the seemingly entrenched perception that the business cycle has seen its peak and the glory days of this bull market have faded. This month, investors will carefully examine the latest jobs report and Fed policy statement, react to the new agreement between the U.S. and China to suspend further trade tariffs, and watch what happens with the Brexit parliamentary vote and the OPEC-Russia meeting early in the month. Hopefully, a turbulent year for equities will end on a positive note.22,23
Q U O T E O F T H E M O N T H
“I am certain there is too much certainty in the world.”
MICHAEL CRICHTON
UPCOMING RELEASES
Here is the docket for the rest of the year: the latest Department of Labor employment report and the initial December University of Michigan consumer sentiment index (12/7), the November wholesale inflation report (12/11), November consumer inflation (12/12), November retail sales and industrial production (12/14), November housing starts and building permits (12/18), an interest rate decision at the Federal Reserve and a fresh existing home sales snapshot from the National Association of Realtors (12/19), the Conference Board’s newest leading indicator index (12/20), November personal spending and hard goods orders, the latest PCE price index, and the final assessment of Q3 growth (12/21), November new home sales and the Conference Board’s December consumer confidence gauge (12/27), and November pending home sales and the year’s final University of Michigan consumer sentiment index reading (12/28).
T H E M O N T H L Y R I D D L E
It is often surrounded by water and at risk from waves, and it has a fin rather than a sail or motor, but without water and waves, there would be no real use for it. What is it?
LAST MONTH’S RIDDLE: It is as old as the world, and yet new each month. What is it?
ANSWER: The moon.
Keystone Team may be reached at 920-969-0717 or admin@kfgwi.com www.KFGWI.com
Know someone who could use information like this? Please feel free to send us their contact information via phone or email. (Don’t worry – we’ll request their permission before adding them to our mailing list.)
Securities and Advisory Services Offered Through Harbour Investments, Inc. FoxRiver Tax Centers LLC is privately held and is not affiliated with Harbour Investments, Inc.
This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. The information herein has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs, or expenses. Investors cannot invest directly in indices. All economic and performance data is historical and not indicative of future results. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is a market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor’s 500 (S&P 500) is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe. The CBOE Volatility Index® (VIX®) is a key measure of market expectations of near-term volatility conveyed by S&P 500 stock index option prices. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. The Hang Seng Index is a free float-adjusted market capitalization-weighted stock market index that is the main indicator of the overall market performance in Hong Kong. The MERVAL Index (MERcado de VALores, literally Stock Exchange) is the most important index of the Buenos Aires Stock Exchange. The Nifty 50 (NTFE 50) is a well-diversified 50-stock index accounting for 13 sectors of the Indian economy. It is used for a variety of purposes such as benchmarking fund portfolios, index-based derivatives and index funds. The BSE SENSEX (Bombay Stock Exchange Sensitive Index), also-called the BSE 30 (BOMBAY STOCK EXCHANGE) or simply the SENSEX, is a free-float market capitalization-weighted stock market index of 30 well-established and financially sound companies listed on the Bombay Stock Exchange (BSE). Nikkei 225 (Ticker: ^N225) is a stock market index for the Tokyo Stock Exchange (TSE). The Nikkei average is the most watched index of Asian stocks. The Korea Composite Stock Price Index or KOSPI is the major stock market index of South Korea, representing all common stocks traded on the Korea Exchange. The MSCI Emerging Markets Index is a float-adjusted market capitalization index consisting of indices in more than 25 emerging economies. The MICEX 10 Index is an unweighted price index that tracks the ten most liquid Russian stocks listed on MICEX-RTS in Moscow. The IBEX 35 is the benchmark stock market index of the Bolsa de Madrid, Spain’s principal stock exchange. The Bovespa Index is a gross total return index weighted by traded volume & is comprised of the most liquid stocks traded on the Sao Paulo Stock Exchange. The S&P/TSX Composite Index is an index of the stock (equity) prices of the largest companies on the Toronto Stock Exchange (TSX) as measured by market capitalization. The FTSE TWSE Taiwan 50 Index consists of the largest 50 companies by full market value and is also the first narrow-based index published in Taiwan. The MSCI World Index is a free-float weighted equity index that includes developed world markets and does not include emerging markets. The FTSEurofirst 300 Index comprises the 300 largest companies ranked by market capitalisation in the FTSE Developed Europe Index. The SSE Composite Index is an index of all stocks (A shares and B shares) that are traded at the Shanghai Stock Exchange. The DAX 30 is a Blue-Chip stock market index consisting of the 30 major German companies trading on the Frankfurt Stock Exchange. The FTSE 100 Index is a share index of the 100 companies listed on the London Stock Exchange with the highest market capitalization. The All Ordinaries (XAO) is considered a total market barometer for the Australian stock market and contains the 500 largest ASX-listed companies by way of market capitalization. The Mexican Stock Exchange, commonly known as Mexican Bolsa, Mexbol, or BMV, is the only stock exchange in Mexico. The US Dollar Index measures the performance of the U.S. dollar against a basket of six currencies. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. MarketingPro, Inc. is not affiliated with any person or firm that may be providing this information to you. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.
